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The "Missing Rich" in Household Surveys: Causes and Correction Approaches Extended Version with Technical Appendixes

Author

Listed:
  • Nora Lustig

    (Tulane University)

  • Andrea Vigorito

    (Universidad de la Republica, Uruguay)

Abstract

Inequality measures based on household surveys may be biased because they fail to capture the upper tail of the income distribution properly. The "missing rich" problem stems from sampling errors, item and unit nonresponse, underreporting of income, and data preprocessing techniques like top coding. This paper reviews salient approaches to address the underrepresentation of the rich in household surveys. Approaches are classified based on information sources and method. In terms of information sources, the distinction is between within-survey data and survey data combined with external sources (e.g., tax records). In terms of methods, we identify three categories: replacing, reweighting, and combined reweighting and replacing. We show that income inequality levels and trends are sensitive to the correction approach. This paper is a companion piece to the chapter of the same name and includes all the appendices that could not be incorporated into the chapter due to space limitations.

Suggested Citation

  • Nora Lustig & Andrea Vigorito, 2025. "The "Missing Rich" in Household Surveys: Causes and Correction Approaches Extended Version with Technical Appendixes," Working Papers 2512, Tulane University, Department of Economics.
    • Handle: RePEc:tul:wpaper:2512
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    File URL: http://repec.tulane.edu/RePEc/pdf/tul2512.pdf
    File Function: First Version, December 2025
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    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • C83 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Survey Methods; Sampling Methods
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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